European Law - Shipowners' liability
Following a spate of accidents at sea over these last years, the EU has been seeking to create in its maritime policy greater accountability by increasing the liability of maritime transport operators.A civil liability scheme for shipowners was drawn...
Following a spate of accidents at sea over these last years, the EU has been seeking to create in its maritime policy greater accountability by increasing the liability of maritime transport operators.
A civil liability scheme for shipowners was drawn up by the Commission in its 2005 Proposal for a Directive on the Civil Liability and Financial Guarantees of Shipowners.
The proposed Directive on ship operators' liability was cleared by the European Parliament on March 29, 2007.
Currently there are no harmonised civil liability regimes for shipowners in Europe. The proposed Directive will establish a set of core rules applicable EU-wide on the civil liability of shipowners and ship operators and on compulsory insurance schemes covering damage to third parties.
These harmonised rules will in future prevent inconsistencies in the application and enforcement of rules on shipowners' liability in the different member states of the EU.
A traditional principle of maritime law endorsed by international conventions allows shipowners to limit their liability for damage caused by ships to third parties. According to this principle, liability will only arise where it results that the damage was a deliberate intent of the shipowner or a reckless act or omission on his part knowing that damage would ensue.
This effectively means that shipowners almost always are able to shirk responsibility for damage caused by their ships to third parties.
The proposed directive will incorporate the 1996 International Maritime Organisation Convention on the Limitation of Liability for Maritime Claims into EU law.
However, the proposed directive intends to provide a complete overhaul of the tradition of limiting liability on maritime claims. The tougher rules of the directive will increase shipowners' liability by requiring them to compensate third parties and passengers in the event of accidents and to take out insurance policies to protect the interests of victims.
However only grossly negligent shipowners will be hard hit by the new rules on civil liability. Those shipowners who act without due care and with total disregard to possible harmful effects of their acts or omissions will be liable in damages.
On the other hand, those shipowners that are mindful of maritime security standards will continue to enjoy the protection of the limitation of their liability.
In all cases, shipowners are obliged to have a financial guarantee to cover any possible maritime claims. An appropriate certificate attesting a valid financial guarantee is issued by the national competent authority of the member state where the ship is registered.
This certificate must be carried on board the ship at all times. In case of maritime accidents, the victim has a direct action against the provider of the financial guarantee to be compensated for the shipowner's liability.
The proposed directive will thus create more reliable and high quality maritime transport by making economic operators act more responsibly. The end result is better protection to victims of accidents at sea.
Dr Grech is an associate with Guido de Maro & Associates and heads its European Law Division.
A civil liability scheme for shipowners was drawn up by the Commission in its 2005 Proposal for a Directive on the Civil Liability and Financial Guarantees of Shipowners.
The proposed Directive on ship operators' liability was cleared by the European Parliament on March 29, 2007.
Currently there are no harmonised civil liability regimes for shipowners in Europe. The proposed Directive will establish a set of core rules applicable EU-wide on the civil liability of shipowners and ship operators and on compulsory insurance schemes covering damage to third parties.
These harmonised rules will in future prevent inconsistencies in the application and enforcement of rules on shipowners' liability in the different member states of the EU.
A traditional principle of maritime law endorsed by international conventions allows shipowners to limit their liability for damage caused by ships to third parties. According to this principle, liability will only arise where it results that the damage was a deliberate intent of the shipowner or a reckless act or omission on his part knowing that damage would ensue.
This effectively means that shipowners almost always are able to shirk responsibility for damage caused by their ships to third parties.
The proposed directive will incorporate the 1996 International Maritime Organisation Convention on the Limitation of Liability for Maritime Claims into EU law.
However, the proposed directive intends to provide a complete overhaul of the tradition of limiting liability on maritime claims. The tougher rules of the directive will increase shipowners' liability by requiring them to compensate third parties and passengers in the event of accidents and to take out insurance policies to protect the interests of victims.
However only grossly negligent shipowners will be hard hit by the new rules on civil liability. Those shipowners who act without due care and with total disregard to possible harmful effects of their acts or omissions will be liable in damages.
On the other hand, those shipowners that are mindful of maritime security standards will continue to enjoy the protection of the limitation of their liability.
In all cases, shipowners are obliged to have a financial guarantee to cover any possible maritime claims. An appropriate certificate attesting a valid financial guarantee is issued by the national competent authority of the member state where the ship is registered.
This certificate must be carried on board the ship at all times. In case of maritime accidents, the victim has a direct action against the provider of the financial guarantee to be compensated for the shipowner's liability.
The proposed directive will thus create more reliable and high quality maritime transport by making economic operators act more responsibly. The end result is better protection to victims of accidents at sea.
Dr Grech is an associate with Guido de Maro & Associates and heads its European Law Division.